The opinion of the court was delivered by: Cathy Ann Bencivengo United States District Judge
ORDER (1) DENYING MOTION FOR INJUNCTION [Doc. No. 74], (2) SUA SPONTE DISMISSING DIMEFF AS A PARTY TO THIS ACTION; (3) GRANTING IN PART MOTION TO DISCHARGE PLAINTIFF [Doc. No. 77]; (4) MAGISTRATE JUDGE REQUIRING COUNSEL TO CONTACT
Plaintiff Casey Gerry Schenk Francavilla Blatt & Pennfield LLP ("Casey Gerry") is a law firm in San Diego. Plaintiff Bixby, Cown & Gerry JV ("BCG JV") is a joint venture formed by certain plaintiffs' attorneys (including the now deceased Richard Gerry and Robert Cowan) in the Exxon Valdez litigation. In this interpleader action, plaintiffs request the court to determine how to distribute the late Robert Cowan's share ("Cowan's Share") of the funds the BCG JV earned in the litigation (the "JV Funds").
Two of the defendants claim the right to Mr. Cowan's share of the JV Funds -- Estate of Robert Cowan ("Estate") and Robert Cowan's late mother's trust, the Oletta L. Cowan Trust ("Trust"). The third defendant, Suzanne Dimeff ("Dimeff"), is Mr. Cowan's sister, was previously the trustee of the Trust, and was also an associate at Casey Gerry who worked on the Exxon Valdez litigation. Since Mr. Cowan's death in 2003, the Trust and the Estate have been involved in probate litigation in Alaska ("Probate Action"), which involves, among other things, their respective rights to Mr. Cowan's portion of the Exxon Valdez attorneys' fees and costs.
Dimeff was an associate at Casey, Gerry from 1989 - 2000 and was one of the attorneys who spent much of her time on the Exxon litigation while at the firm. Although Dimeff was paid a salary, in 1993, Casey Gerry also agreed to pay her a portion of the attorneys' fees from the Exxon litigation. Dimeff and Casey Gerry entered into an agreement entitled "Memorandum of Understanding of Firm and Richard F. Gerry" ("the Agreement")*fn1 . Pursuant to the Agreement, Dimeff was entitled to "5% of gross fees" collected in the Exxon litigation by the BCG JV. Upon her exit in 2000, Casey Gerry affirmed its agreement with Dimeff and agreed to reconsider the amount (the 5%) in the Agreement if Dimeff engaged in "extraordinary efforts" making the 5% inappropriate. The Agreement has an arbitration clause. [Doc. No. 107-1 at 9-10.]
Plaintiffs filed the complaint in interpleader on April 19, 2010. [Doc. No. 1.] Plaintiffs have deposited almost $2 million with the Court (the "res"). [Doc. Nos. 14 and 63.] The Estate and the Trust answered and filed counter/cross claims. [Doc. Nos. 12, 32-34, 39, 45.] However, Dimeff was unable to appear in this action because the Alaska probate court enjoined Dimeff from participating in other proceedings, including this interpleader action, by issuing a Cease and Desist order at the request of the
On August 11, 2010, The Trust filed a motion seeking to enjoin the Estate and the Alaska probate court from preventing Dimeff from participating in this interpleader action. [Doc. No. 42.] On March 30, 2011, District Judge Lorenz granted the motion in part by ordering the Estate to withdraw the motion in the Alaska Court that had led the Alaska court to issue a Cease and Desist order. [Doc. No. 64.] The Estate complied and Dimeff was allowed to participate in this action. Dimeff filed an answer [Doc. No. 71] and a counterclaim [Doc. No. 72].
A. Current motions pending in federal court.
On May 2, 2011, the Trust and Dimeff filed a motion for injunction against plaintiffs. [Doc. No. 74.] On June 9, 2011, plaintiffs filed an opposition to the motion for injunction. [Doc. No. 79.] On June 15, 2011, defendants Trust and Dimeff filed a reply. [Doc. No. 81.]
On May 20, 2011, plaintiffs filed a motion to discharge plaintiffs. [Doc. No. 77.] On June 17, 2011, defendants Trust and Dimeff filed an opposition. [Doc. No. 83.] On June 17, 2011, defendant Estate of Robert Cowan ("Estate") filed a response to plaintiff's motion to discharge. [Doc. No. 84.] On June 24, 2011, plaintiffs filed a reply. [Doc. No. 85.]
On June 27, 2011, District Judge Sammartino vacated the hearing regarding the motion for injunction and took the matter under submission. [Doc. No. 86.] On July 7, 2011, District Judge Sammartino vacated the hearing regarding the motion to discharge and took the matter under submission. [Doc. No. 87.] On February 15, 2012, the case was transferred to District Judge Bencivengo. [Doc. No. 97.] On May 14, 2012, plaintiffs filed a supplemental request for judicial notice in support of opposition to motion for injunction. [Doc. No. 106.] On May 18, 2012, defendants Trust and Dimeff filed a supplemental request for judicial notice in support of motion for injunction. [Doc. No. 107.]*fn2 On 23, 2012, the Court held a hearing with regard to both motions. [Doc. No. 108.] B. Current State Court Proceedings.
On March 7, 2011, plaintiff Casey, Gerry filed a Petition to Compel Arbitration against Dimeff in the San Diego Superior Court, Case No. 37-2011-00087062-CU-PT-CTL (hereinafter the "Petition") with regard to Dimeff's claim for further monies under the Agreement. [Doc. No. 74-3.] Dimeff was served with the Petition on April 22, 2011. [Doc. No. 74-1 at 2.] On June 3, 2011, Superior Court Judge Timothy Taylor granted the Petition. [Doc. No. 107-1.] On February 27, 28, March 2 and 3, arbitration with regard to Dimeff's claims for additional monies under the Agreement was held before the Honorable Michael Orfield. [Doc. No. 106 at 2.] On March 27, 2012, Judge Orfield issued an arbitration award that was in favor of Casey, Gerry. [Doc. No. 106 at 3.] Plaintiff Casey, ...